Financial Management Practices of Food Cart Franchises in Selected Areas in Mandaluyong City, Philippines

Abstract

This study aimed to determine the effectiveness of financial management practices of food cart franchises in Mandaluyong City, Philippines. Through the descriptive method of research, the profile of the respondents were determined; the effectiveness of the Planning, Controlling Inventory Level and Cash Management Practices had been assessed. It was discovered that franchising businesses in the vicinity were owned equally three types of business organizations. It was disclosed that of the 200 respondents, 75% have start-up businesses that operated in less than 3 years where 57% respondents have 2-3 employees in the store. The monthly average earnings which (80 or 40%) of the respondents were earning P 30,000.00 monthly gross sale and 45.5 % offer multiple products. In Planning, “The owner/manager is in charge of drafting a financial plan”, in Controlling Inventory Level, “There is physical safeguards of inventory against theft” and finally, for Cash Management Practices “The business sets the minimum cash balance based on historical data” were perceived to be highest by the respondents with weighted mean of 4.29, 4.15 and 4.56, respectively. It was found in the study that there is no significant difference on the respondent’s perception when grouped according to Type of Ownership, Number of years in operation and number of employees and thus interpreted as Effective in all Financial Management variables. In addition, when grouped according to average monthly gross sales and number of products offered, there is no significant difference in Controlling inventory level and Cash management practices. However, in the Planning aspect, the respondent’s perception is Not Effective. The researcher recommends that in the Planning, an extensive research about the financial risk and operational risk of the business should be taken into consideration. In Controlling Inventory level, the physical safeguards of inventory against theft should be maintained. Overhead cost of inventory should also be reviewed and monitored. Finally, for cash management practices, the franchises should maintain and afford the use of computer assisted techniques in monitoring and keeping track of the sales and disbursements as well as the full system control.